Top Industrial Nations Back Mexico Rescue

February 05, 1995|By New York Times News Service.

TORONTO — Financial leaders of the seven leading industrial countries expressed "full satisfaction" Saturday with American-led efforts to rescue the Mexican economy, but said they wanted international organizations to improve their ability to forestall similar crises.

Finance ministers of the Group of Seven countries were meeting in Toronto as the crisis of recent weeks over the fragile state of Mexico's finances appeared to be easing.

European ministers made a determined effort to tone down disagreements earlier in the week with the U.S. over Mexican aid.

The International Monetary Fund, which is supposed to provide early warning of financial crises, has been criticized for failing to anticipate the difficulties in Mexico. The ministers said they had discussed the need for the monetary fund and the World Bank to improve their ability to detect problems early.

Treasury Secretary Robert Rubin said the problem was the "almost instantaneous flows of capital that take place in today's financial markets." He said the IMF and World Bank "need to be as modern as the world we live in."

The discord between the United States and European allies related to President Clinton's failure to consult them as he changed gears in the face of overwhelming congressional opposition to an earlier proposal that would have required the approval of the Congress. He then announced a new $50 billion Mexican aid plan that did not require congressional approval.

The ministers spent a good deal of time discussing conditions in Russia. They said they welcomed "the state of commitment of the Russian government to economic reform," but noted "with concern the recent rebound in inflation and substantial risks for the budget, which have been heightened by the situation in Chechnya."